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June 23, 2010
DA 10-1112
VIA CERTIFIED MAIL RETURN RECEIPT REQUESTED
AND E-MAIL (Ben@Rowner.com)
Mr. Benjamin Rowner
c/o Federal Correctional Institution
Otisville, NY Satellite Prison Camp
P.O. Box 1000
Otisville, NY 10963
Re: Notice of Debarment
File No. EB-10-IH-2079
Dear Mr. Rowner:
Pursuant to section 54.8 of the rules of the Federal Communications
Commission (the "Commission"), by this Notice of Debarment you are
debarred from the schools and libraries universal service support
mechanism (or "E-Rate program") for a period of three years.
On April 7, 2010, the Enforcement Bureau (the "Bureau") sent you a Notice
of Suspension and Initiation of Debarment Proceedings (the "Notice of
Suspension"). That Notice of Suspension was published in the Federal
Register on April 21, 2010. The Notice of Suspension suspended you from
participating in activities associated with or relating to the schools and
libraries universal service support mechanism and described the basis for
initiation of debarment proceedings against you, the applicable debarment
procedures, and the effect of debarment.
Pursuant to the Commission's rules, any opposition to your suspension or
its scope or to your proposed debarment or its scope had to be filed with
the Commission no later than thirty (30) calendar days from the earlier
date of your receipt of the Notice of Suspension or publication of the
Notice of Suspension in the Federal Register. The Commission did not
receive any such opposition.
As discussed in the Notice of Suspension, you pleaded guilty to and were
sentenced to serve twenty-seven months in federal prison, to be followed
by twenty-four months of supervised release for federal crimes in
connection with your participation in a scheme to defraud the E-Rate
program. You held yourself out as an E-Rate salesperson and installer and
admitted that you and others devised schemes to defraud school districts
and the E-Rate program by having your co-conspirators steer E-rate related
contracts to various companies that directly benefited you, your
conspirators, and your company. You were also ordered to pay $271,716 in
restitution to USAC for your role in the schemes. Such conduct constitutes
the basis for your debarment, and your conviction falls within the
categories of causes for debarment under section 54.8(c) of the
Commission's rules. For the foregoing reasons, you are hereby debarred for
a period of three years from the debarment date, i.e., the earlier date of
your receipt of this Notice of Debarment or its publication date in the
Federal Register.
Debarment excludes you, for the debarment period, from activities
associated with or related to the schools and libraries support mechanism,
including the receipt of funds or discounted services through the schools
and libraries support mechanism, or consulting with, assisting, or
advising applicants or service providers regarding the schools and
libraries support mechanism.
Sincerely,
Hillary S. DeNigro
Chief
Investigations and Hearings Division
Enforcement Bureau
cc: Marietta Parker, United States Attorney's Office, Department of
Justice (via e-mail)
Kristy Carroll, Esq., Universal Service Administrative Company (via
e-mail)
April 7, 2010
DA 10-584
VIA CERTIFIED MAIL RETURN RECEIPT REQUESTED
AND E-MAIL (jmontana@vedderprice.com) AND FACSIMILE (312) 609-5005
Mr. Benjamin Rowner
c/o Vedder Price P.C.
Attn: James S. Montana, Jr.
222 North LaSalle Street, Suite 2600
Chicago, IL 60601
Re: Notice of Suspension and Initiation of Debarment Proceedings,
File No. EB-10-IH-2079
Dear Mr. Rowner:
The Federal Communications Commission ("FCC" or "Commission") has received
notice of your guilty plea for conspiracy to defraud the United States in
violation of 18 U.S.C. S: 371 in connection with your participation in the
schools and libraries universal service support mechanism ("E-Rate
program"). Consequently, pursuant to 47 C.F.R. S: 54.8, this letter
constitutes official notice of your suspension from the E-Rate program. In
addition, the Enforcement Bureau ("Bureau") hereby notifies you that we
are commencing debarment proceedings against you.
I. Notice of Suspension
The Commission has established procedures to prevent persons who have
"defrauded the government or engaged in similar acts through activities
associated with or related to the schools and libraries support mechanism"
from receiving the benefits associated with that program. On July 10,
2008, you, Benjamin Rowner, entered a plea agreement and pleaded guilty to
knowingly and intentionally conspiring with others to defraud and obtain
money from the E-Rate Program through submission of materially false
representations, concealment of material facts, mail fraud, wire fraud,
and intentional manipulation of the competitive bidding process.
Specifically, from Fall 1999 to at least November 2003, you held yourself
out as an E-Rate salesperson and installer for the purpose of defrauding
the E-Rate Program. You admitted that you and others devised schemes to
defraud school districts and the E-Rate program by having your
co-conspirators steer E-rate related contracts to various companies that
directly benefited you, your conspirators, and your company, primarily
DeltaNet, Inc. In furtherance of the schemes, you submitted misleading,
fraudulent and false documents to the Universal Service Administrative
Company ("USAC") claiming schools were paid or would pay their co-pay,
submitted other materially false and fraudulent documents to USAC, and
concealed from the school districts relationships with co-conspirators in
order to induce schools to select your companies as service providers in
violation of E-Rate Program rules. Ultimately, your conspiracy was
comprised of two closely related schemes that affected at least thirteen
different schools in eight different states across the United States.
On February 4, 2010, you were sentenced to serve twenty-seven months in
prison, to be followed by twenty-four months of supervised release for
your role in the scheme to defraud the E-Rate program. You were also
ordered to pay $271,716 in restitution to USAC for your role in the
schemes.
Pursuant to section 54.8 of the Commission's rules, your conviction
requires the Bureau to suspend you from participating in any activities
associated with or related to the schools and libraries support mechanism.
Such activities include the receipt of funds or discounted services
through the schools and libraries support mechanism, or consulting with,
assisting, or advising applicants or service providers regarding the
schools and libraries support mechanism.
Your suspension becomes effective upon the earlier of your receipt of this
letter or publication of notice in the Federal Register, pending the
Bureau's final debarment determination. In accordance with the
Commission's debarment rules, you may contest this suspension or the scope
of this suspension by filing arguments in opposition to the suspension,
with any relevant documentation. Your request must be received within 30
days after you receive this letter or after notice is published in the
Federal Register, whichever comes first. Such requests, however, will not
ordinarily be granted. The Bureau may reverse or limit the scope of
suspension only upon a finding of extraordinary circumstances. The Bureau
will decide any request for reversal or modification of suspension within
90 days of its receipt of such request.
II. Initiation of Debarment Proceedings
Your guilty plea and conviction of criminal conduct in connection with the
E-Rate program, in addition to serving as a basis for immediate suspension
from the program, also serves as a basis for the initiation of debarment
proceedings against you. Your conviction falls within the categories of
causes for debarment defined in section 54.8(c) of the Commission's rules.
Therefore, pursuant to section 54.8 of the Commission's rules, your
conviction requires the Bureau to commence debarment proceedings against
you.
As with your suspension, you may contest debarment or the scope of the
proposed debarment by filing arguments and any relevant documentation
within 30 calendar days of the earlier of the receipt of this letter or of
publication in the Federal Register. Absent extraordinary circumstances,
the Bureau will debar you. The Bureau will decide any request for reversal
or limitation of debarment within 90 days of receipt of such request. If
the Bureau decides to debar you, its decision will become effective upon
the earlier of your receipt of a debarment notice or publication of the
decision in the Federal Register.
If and when your debarment becomes effective, you will be prohibited from
participating in activities associated with or related to the schools and
libraries support mechanism for three years from the date of debarment.
The Bureau may, if necessary to protect the public interest, extend the
debarment period.
Please direct any response, if by messenger or hand delivery, to Marlene
H. Dortch, Secretary, Federal Communications Commission, 445 12th Street,
S.W., Room TW-A325, Washington, D.C. 20554, to the attention of Rebekah
Bina, Attorney Advisor, Investigations and Hearings Division, Enforcement
Bureau, Room 4-C330, with a copy to Michele Levy Berlove, Acting Assistant
Chief, Investigations and Hearings Division, Enforcement Bureau, Room
4-C330, Federal Communications Commission. If sent by commercial overnight
mail (other than U.S. Postal Service Express Mail and Priority Mail), the
response should be sent to the Federal Communications Commission, 9300
East Hampton Drive, Capitol Heights, Maryland 20743. If sent by
first-class, Express, or Priority mail, the response should be sent to
Rebekah Bina, Attorney Advisor, Investigations and Hearings Division,
Enforcement Bureau, Federal Communications Commission, 445 12th Street,
S.W., Room 4-C330, Washington, DC, 20554, with a copy to Michele Levy
Berlove, Acting Assistant Chief, Investigations and Hearings Division,
Enforcement Bureau, Federal Communications Commission, 445 12th Street,
S.W., Room 4-C330, Washington, DC, 20554. You shall also transmit a copy
of the response via email to Rebekah.Bina@fcc.gov and to
Michele.Berlove@fcc.gov.
If you have any questions, please contact Ms. Bina via mail, by telephone
at (202) 418-7931 or by e-mail at Rebekah.Bina@fcc.gov. If Ms. Bina is
unavailable, you may contact Ms. Michele Levy Berlove, Acting Assistant
Chief, Investigations and Hearings Division, by telephone at (202)
418-1477 and by e-mail at Michele.Berlove@fcc.gov.
Sincerely,
Hillary S. DeNigro
Chief
Investigations and Hearings Division
Enforcement Bureau
cc: United States Attorney's Office, Department of Justice (via e-mail)
Kristy Carroll, Esq., Universal Service Administrative Company (via
e-mail)
47 C.F.R. S: 54.8(g) (2008). See also 47 C.F.R. S: 0.111(a)(14).
Letter from Hillary S. DeNigro, Chief, Investigations and Hearings
Division, Enforcement Bureau, Federal Communications Commission, to Mr.
Benjamin Rowner, Notice of Suspension and Initiation of Debarment
Proceedings, 25 FCC Rcd 3512 (Inv. & Hearings Div., Enf. Bur. 2010)
(Attachment 1) ("Notice of Suspension").
75 Fed. Reg. 20846 (April 21, 2010).
See Notice of Suspension, 25 FCC Rcd at 3513-15.
See 47 C.F.R. S:S: 54.8 (e)(3), (4). That date occurred no later than May
21, 2010. See supra note 3.
See Notice of Suspension, 25 FCC Rcd at 3513. See also United States v.
Benjamin Rowner, Criminal Docket No. 1:08-cr-00464-1, Plea Agreement (N.D.
Ill. filed Feb. 4, 2010 and entered Mar. 15, 2010) ("Rowner Judgment");
United States v. Benjamin Rowner, Criminal Docket No. 1:08-cr-00464-1,
Plea Agreement (N.D. Ill. filed July 10, 2008 and entered July 14, 2008)
("Rowner Plea"); United States v. Benjamin Rowner and Jay H. Soled,
Criminal Docket No. 1:08-cr-20047-01-02 CM/JPO, Information (D. Kan. filed
and entered Apr. 23, 2008) ("Rowner and Soled Information").
See Notice of Suspension, 25 FCC Rcd at 3513.
Id.
47 C.F.R. S: 54.8(c). See also S:S: 54.8(a)(4), (b)-(e).
See 47 C.F.R. S:S: 54.8(e)(5), (g). See also Notice of Suspension, 25 FCC
Rcd at 3515.
See 47 C.F.R. S:S: 54.8(a)(1), (a)(5), (d), (g); Notice of Suspension, 25
FCC Rcd at 3515.
Any further reference in this letter to "your conviction" refers to your
guilty plea and subsequent sentencing for conspiracy to defraud the United
States. United States v. Benjamin Rowner, Criminal Docket No.
1:08-cr-00464-1, Plea Agreement (N.D. Ill. filed Feb. 4, 2010 and entered
Mar. 15, 2010) ("Rowner Judgment"); United States v. Benjamin Rowner,
Criminal Docket No. 1:08-cr-00464-1, Plea Agreement (N.D. Ill. filed July
10, 2008 and entered July 14, 2008) ("Rowner Plea"); United States v.
Benjamin Rowner and Jay H. Soled, Criminal Docket No. 1:08-cr-20047-01-02
CM/JPO, Information (D. Kan. filed and entered Apr. 23, 2008) ("Rowner and
Soled Information").
47 C.F.R. S: 54.8; see also 47 C.F.R. S: 0.111 (delegating to the
Enforcement Bureau authority to resolve universal service suspension and
debarment proceedings). The Commission adopted debarment rules for the
schools and libraries universal service support mechanism in 2003. See
Schools and Libraries Universal Service Support Mechanism, Second Report
and Order and Further Notice of Proposed Rulemaking, 18 FCC Rcd 9202
(2003) ("Second Report and Order") (adopting section 54.521 of the
Commission's rules to suspend and debar parties from the E-Rate program).
In 2007, the Commission extended the debarment rules to apply to all of
the Federal universal service support mechanisms. Comprehensive Review of
the Universal Service Fund Management, Administration, and Oversight;
Federal-State Joint Board on Universal Service; Schools and Libraries
Universal Service Support Mechanism; Lifeline and Link Up; Changes to the
Board of Directors for the National Exchange Carrier Association, Inc.,
Report and Order, 22 FCC Rcd 16372, 16410-12 (2007) (Program Management
Order) (renumbering section 54.521 of the universal service debarment
rules as section 54.8 and amending subsections (a)(1), (5), (c), (d),
(e)(2)(i), (3), (e)(4), and (g)).
Second Report and Order, 18 FCC Rcd at 9225, P: 66. The Commission's
debarment rules define a "person" as "[a]ny individual, group of
individuals, corporation, partnership, association, unit of government or
legal entity, however, organized." 47 C.F.R. S: 54.8(a)(6).
Rowner Plea at 2-3; see also Rowner and Soled Information at 5-12;
Department of Justice Press Release (Apr. 23, 2008), available at
http://www.justice.gov/atr/public/press_releases/2008/232526.htm ("DOJ
April 2008 Press Release").
Rowner Plea at 3-8; see also Rowner and Soled Information at 5-12.
Rowner Plea at 3-8; see also Rowner and Soled Information at 5-12;
Department of Justice Press Release (Feb. 4, 2010), available at
http://chicago.fbi.gov/dojpressrel/pressrel10/cg020410a.htm ("DOJ February
2010 Press Release").
Rowner Plea at 3-8; see also Rowner and Soled Information at 5-12.
Rowner Plea at 4-6; see also Rowner and Soled Information at 8-11 (Listing
the schools and states including Wisconsin, Illinois, Kansas, California,
Oregon, New York, New Jersey, and Arkansas); DOJ February 2010 Press
Release at 1.
Rowner Judgment at 2-3; see also DOJ February 2010 Press Release at 1.
Rowner Judgment at 4-5 (You were also ordered to pay a $100 assessment);
see also DOJ February 2010 Press Release at 1.
47 C.F.R. S: 54.8(b)-(e); see also 47 C.F.R. S: 54.8(a)(4); Second Report
and Order, 18 FCC Rcd at 9225-27, P:P: 67-74.
47 C.F.R. S: 54.8(a)(1); see also 47 C.F.R. S: 54.8(a)(3).
47 C.F.R. S: 54.8(a)(7), (e)(1); see also Second Report and Order, 18 FCC
Rcd at 9226, P: 69..
47 C.F.R. S: 54.8(e)(4).
Id.
Id.
47 C.F.R. S: 54.8(e)(5).
See Second Report and Order, 18 FCC Rcd at 9226, P: 70; see also 47 C.F.R.
S: 54.8(e)(5),(f).
"Causes for suspension and debarment are the conviction of or civil
judgment for attempt or commission of criminal fraud, theft, embezzlement,
forgery, bribery, falsification or destruction of records, making false
statements, receiving stolen property, making false claims, obstruction of
justice and other fraud or criminal offense arising out of activities
associated with or related to the schools and libraries support
mechanism." 47 C.F.R. S: 54.8(c). Such activities "include the receipt of
funds or discounted services through [the Federal universal service]
support mechanisms, or consulting with, assisting, or advising applicants
or service providers regarding [the Federal universal service] support
mechanism." 47 C.F.R. S: 54.8(a)(1).
See 47 C.F.R. S: 54.8(b), (c).
See 47 C.F.R. S: 54.8(e)(3), (e)(5); see also Second Report and Order, 18
FCC Rcd at 9226, P: 70.
47 C.F.R. S: 54.8(e)(5); see also Second Report and Order, 18 FCC Rcd at
9227, P: 74.
See 47 C.F.R. S: 54.8(e)(5), (f); see also Second Report and Order, 18
FCC Rcd at 9226, P: 70.
47 C.F.R. S: 54.8(e)(5). The Commission may reverse a debarment or may
limit the scope or period of debarment upon a finding of extraordinary
circumstances, following the filing of a petition by you or an interested
party or upon motion by the Commission. 47 C.F.R. S: 54.8(f).
Second Report and Order, 18 FCC Rcd at 9225, P: 67; 47 C.F.R. S:
54.8(d),(g).
47 C.F.R. S: 54.8(g).
Mr. Benjamin Rowner
June 23, 2010
Page 3 of 3
Federal Communications Commission
Enforcement Bureau
Investigations and Hearings Division
445 12th Street, SW, Suite 4-C330
Washington, D.C. 20554
Mr. Benjamin Rowner
April 7, 2010
Page 5 of 5
Attachment 1
Federal Communications Commission
Enforcement Bureau
Investigations and Hearings Division
445 12th Street, SW, Suite 4-C330
Washington, D.C. 20554